Penn State released budget allocations for fiscal year 2028. See the changes
Penn State released its budget allocations for the fiscal year 2027-28, which reflect the closure of seven commonwealth campuses at the end of the spring 2027 semester.
The seven closing campuses, DuBois, Fayette, Mont Alto, New Kensington, Shenango, Wilkes-Barre and York, are not included in the budget allocation breakdown provided on the university’s website. In the budget allocations for student support costs, the Vice President of Commonwealth Campuses allocation was cut by nearly 59% from the FY2027 budget of $19.8 million. The FY2028 budget allocation is about $8.1 million.
Also reflected is the university moving away from WPSU, after the board agreed to sell WPSU’s operating assets to WHYY citing the cost and declining resources. The Admin Support Costs budget allocation shows a 100% decrease in funding from FY2027 to FY2028.
The university sets its budget two years in advance, so the 2026-27 operating budget and tuition schedules that go into effect this July were already approved in July 2025. The FY2028 budget will be presented to the trustees for approval in July, a release from the university states.
The budget model primarily uses student headcount and credit hours to allocate funding to colleges and campuses, the university said in a press release.
“Our approach will always focus on student success and high-quality educational experiences,” said Penn State President Neeli Bendapudi. “The budget model helps to bring greater clarity to how resources align with these goals, enabling us to react swiftly to changing student needs, interests and priorities; quickly identify and invest in academic and research growth opportunities; and fund initiatives that are core to our strategic vision.”
She said the university is not immune to the many challenges higher ed is facing, like changing demographics, enrollment declines, flat state funding and rising costs. Bendapudi and Executive Vice President and Provost Fotis Sotiropoulos said the university is in a strong position, but the pool of money that supports Penn State’s academic mission is not keeping pace with rising costs.
Sotiropoulos added that Penn State needs to be thoughtful and intentional in every aspect of its operations, including academic offerings, and pointed to the Academic Portfolio and Program Review that will enter the next phase this year.
“The goal is to make certain that Penn State’s academic offerings are strategic, sustainable and aligned with student interests and demand, as well as state and national workforce needs and trends,” Sotiropoulos said.
Budget allocations
Overall the projected changes in the FY2028 are “modest,” Sara Thorndike, senior vice president for finance and business/treasurer and chief financial officer, said in the release. There is an overall decrease of about 1.1%, or $24.6 million, in unit-based allocations. Thorndike said they were able to hold the total reduction to 1.1% due to temporary funding adjustments in the budget model. The release noted $10 million in provost academic subvention to the commonwealth campuses from the president’s strategic fund and covering a $4 million reduction for the Office of Physical Plant with investment income outside of the model.
The initial allocations and revenues shown for the education and general budget do not yet include funds for employee compensation and benefits increases. Additional funding is expected to come, the release said.
University Park colleges that have the biggest cuts are Earth and Mineral Sciences (-3.92%, or -$2.08 million), Education (-3.26%, or -$1.2 million), International Affairs (-5.16%, or -$110,496), and Nursing (-3.53%, or -$615,406). Colleges that saw the biggest increases are Communications (937,455, or 3.66%) and Engineering (4,882,201, or 3.71%).
Overall, University Park colleges as a whole saw a -0.59% decrease in funding, or about -$5 million, bringing the total funding to $856,484,001.
Of the commonwealth campuses that are staying open, none saw a dramatic decrease in funding. The Schuylkill campus saw the largest percentage increase of funding, receiving a change of $731,583 (10.06%), bringing its funding up to $8,007,360. Erie also saw a larger percentage increase of 5.31%, or $2.4 million. No campuses saw a dramatic decrease in funding.
Student Support Costs allocations that have a decrease in funding include the Penn State Dickinson Law, a decrease of -$2.1 million, or -12.2%, and University Libraries, a decrease of -$2.3 million, or -4.2%. Education Equity funding was increased by $386,075, or 7.37%.
Admin Support Costs allocations that increased include Strategic Communications, which received a 21.2% increase (about $3.5 million). Police and Public Safety saw a decrease of 7.7%, or -$2.3 million.
